BA chief hits out over strike firm's 'stupidity'

AVIATION is a ruthless world where hard-won reputations can be lost in days. When Sir Rod Eddington, British Airways' departing chief executive, unveiled stunning first-quarter profits less than ten days ago, he left grateful shareholders and staff with a management halo and a sky-high reputation.

Only weeks later, amid the carnage of another industrial relations disaster, there are mutterings that all the talk of 'miracle worker' Eddington was overblown.

The man who rescued the airline from terrorism, a Concorde crash, recession, soaring fuel prices and Sars is this weekend in charge of a dispute that is likely to cost BA more than £40m and which will raise questions about his ruthless strategy of slashing costs.

After all, this is the third successive summer that the airline has been at the centre of holiday misery.

In 2003 BA was hit by a dispute about the working practices of checkout staff. Last August it was forced to cancel scores of flights because of an appalling underestimation of staffing arrangements. And last week his staff walked out in sympathy with workers sacked by a BA catering supplier.

An unrepentant Eddington, who stands down next month, has been at war against soaring costs and old-style 'Spanish' working practices for five years.

'The battle against costs is never won,' Eddington told Financial Mail, though the latest financial figures show that £600m has been cut at a time when fuel costs have soared to record levels.

BA managers have negotiated with unions to get rid of many of its more bizarre practices, such as having two buses to meet an aircraft - one for the passengers and one for the crew.

And despite criticism that the airline appeared to be caught on the hop by last week's walkout, senior executives insist they have learned lessons from every recent industrial relations disaster.

The 2003 attack on working practices was made too abruptly and at the wrong time of the year. Last year's scheduling disaster was due to incompetent management and there have been changes in staffing. This year the airline has realised that being too close to one supplier is a risk not worth taking.

Eddington maintains that management by brutal diktat is unintelligent and does not solve the problem.

'Bad working practices have to be changed, but changed through negotiations and intelligently,' he says.

But what happened last Wednesday in a car park in Hounslow, near Heathrow, was everything that Eddington says he condemns. It was crude, unintelligent and ultimately totally counter-productive.

When Gate Gourmet sacked 650 workers - some of them pregnant - by bellowing through a megaphone in the car park, it was, he believes. the inevitable trigger for retaliation.

In the closeknit Asian community around Heathrow, sacking lowly paid workers in such humiliating terms was an outrage.

Many Gate Gourmet workers had relatives employed by BA - not surprising since the airline sold its catering division to Gate Gourmet in 1997 for £60m.

The illegal sympathy strike action by 1,000 BA staff had the understanding and sympathy of all BA workers, even at the highest level.

Eddington, whose wife is Asian, has diplomatically refused to comment on Gate Gourmet's management style. Publicly, he says: 'I would like to apologise unreservedly to our customers who have suffered because we have been dragged into a dispute not of our doing.'

But he has not hidden his anger to close friends at the 'stupidity' of Gate Gourmet. 'When you tackle change, you need to be clever and box clever,' he said. 'What happened out there was unintelligent and stupid,' he is alleged to have said, adding 'You can't treat people in this way. They were not fat cats for God's sake, they were hard-working lowly paid people.'

As for Gate Gourmet, it is satisfied it has not made any mistakes in its handling of the dispute, which started after an attempt to change working conditions and cut the workforce. A spokesman said it was haemorrhaging cash and unless there were agreed changes, the company would go into administration. As for sacking people by megaphone, he said: ' Sometimes the only way to communicate with the staff is by megaphone.'

Eddington claims BA has again learned lessons. Contingency planning to look for alternatives to Gate Gourmet, which makes 80,000 meals a day for the airline, will be stepped up. BA has no intention of breaking its contract with the caterer before it runs out next year, but if Eddington's level of hostility is to be believed, few would bet on it being renewed.

Whether BA should have made itself a hostage to fortune by signing up with only one food supplier for so long is questionable. In future, it will almost certainly change the way it feeds passengers so it will be able to call on kitchens all over the world. Never again does it want to be caught out in this fashion.

'We have learned a terrible lesson from this dispute,' said Eddington.

As for his reputation, most fair-minded people would say it remains intact.

Some would say that chief executives make their own luck. What this latest black mark - and multi-million pound loss - illustrates is that Eddington is likely to go down as the unluckiest chief executive in modern history.